Neoliberalism – a misunderstood ideology

This is the first issue of my new political blog, Political Bytes, which is intended to be short and pithy with both a New Zealand and international focus. It is quite different in focus and length from my more specific health systems blog Otaihanga Second Opinion at https://otaihangasecondopinion.wordpress.com/

The lazy use of words annoys me. Political correctness is a case in point. It has become a throwaway line to describe anything that one (usually but not always the political right) doesn’t like. As such it become meaningless. On those few occasions when there might be some substance to it, didactic would often be a better description.

Not to the same extent but still sufficiently annoying is the use of the word neoliberalism. Some use it correctly but, in mainstream and social media, neoliberalism is used as if it is simply another brand name for capitalism and in a way that makes to two words indistinguishable.

One of the best articles I’ve read analysing neoliberalism is by American socialist and editor of Monthly Review Jeremy Bellamy Foster https://monthlyreview.org/2019/05/01/absolute-capitalism/.

Foster begins by observing that although widely recognised as the central ideological platform for capitalism in the 21^st century, neoliberalism is a rarely used word by those in power. He defines it as a strategic aim to embed the state in capitalist market relations. It is where the state’s traditional role of “safeguarding social reproduction” (on capitalist terms) is reduced to solely one of promoting capitalist reproduction.

He notes that neoliberalism is not a new ideology. It first appeared in the early 1920s with the collapse of liberalism and in response to the rise of social democracy, particularly in Germany and Austria (quite unrecognisable from the much paler contemporary version part of which has adopted neoliberalism).

The state’s traditional role of “safeguarding social reproduction” is evidenced in areas like health, education, social housing and other universally needed public goods. In New Zealand the foundations were provided by Roger Douglas and the Labour government of the 1980s with the introduction of monetarism as the key economic tool. Monetarism and neoliberalism can comfortably coexist but the former doesn’t necessarily mean the latter; more economic change is required.

Neoliberalism didn’t really take off until the National-led governments of the 1990s. Health is a case in point with legislation adopted putting public hospitals under the coverage of the Commerce and Companies Acts in an endeavour to make them behave as if they were competitive businesses. On a smaller scale this was also the case with the fiercely contested move to bulk fund schools. Neither situation exist today.

Does this mean that our current Labour led government is neoliberal? It is certainly reluctant to directly challenge the neoliberalism legacy and in some sectors such as telecommunications and electricity it remains. But doesn’t form part of health or education policy. Nor does it in social housing despite its present difficulties. Its decision not to support taxing capital gains was a poor decision but not a neoliberal one.

This government is neither socialist nor neoliberal. Instead it is pro-capitalist within a social liberal and liberal technocratic framework. Consequently it does see the state actively playing a ‘safeguarding social reproduction’ role without expressing it this way.